The search for the last passenger missing after a fiery hot-air balloon crash in Virginia has transitioned from a rescue operation to a recovery operation, state police said Saturday.

Search teams located two of the three occupants of the balloon by noon Saturday. Remains were sent to the chief medical examiner in Richmond, Virginia State Police spokeswoman Corinne Geller said at a press conference.

"We have still not located the basket or the balloon, but we do continue to locate debris," Geller said, noting the fire may have burned up the parachute and basket. "It can be like looking for a needle in a haystack."

Geller says police are hopeful they will find the third occupant by Saturday evening. "We have three deceased people and our focus is on finding the third person," she said.

The Washington Post identified two of the victims as women's basketball officials at the University of Richmond: associate head coach Ginny Doyle, 44; and Natalie Lewis, 24, the director of basketball operations. The paper identified Lewis as the missing passenger; the third victim was not identified

The incident happened shortly before 8 p.m. Friday evening in Caroline County, Va., after three hot-air balloons took off from Meadow Event Park. Two of the balloons landed safely, but as the third balloon attempted to land, it struck a power line and burst into flames.

"It contacted power lines, caught on fire and crashed in a wooded area," says Peter Knudson, a spokesman for the National Transportation Safety Board.

Investigators found some pieces of the Eagle balloon, but are still searching for major components, Knudson said late Saturday afternoon.

It appears that the occupants left the basket before it crashed, he said, adding that it wasn't clear if they fell or jumped.

Twenty balloonists from the Mid-Atlantic region were set to participate in the weekend festival, said Greg Hicks, a spokesman for Meadow Event Park, which also is the site of the State Fair of Virginia.

"It's just a shocking situation for everyone," Hicks said.

Based on witness accounts, the pilot attempted to regain control of the balloon and manage the fire. At one point, the balloon's two passengers leapt from the basket. Witnesses recall hearing an explosion, and the fire continued to spread. The basket and the balloon then separated.

"As soon as we looked up, the thing blew up right there," witness Debra Ferguson told The Free Lance-Star of Fredericksburg, Va. "All I heard was, 'Oh my God, Oh my God,' and all you saw was the top of the balloon still flying, but all of the basket was gone. All of the flames just disappeared. ... It was like a match — poof — and then it was gone."

Carrie Hager-Bradley said she saw the balloon in flames on her way home from the grocery store and heard people yelling, according to WWBT TV.

"They were just screaming for anybody to help them," the station quoted her as saying. "'Help me, help me, sweet Jesus, help. I'm going to die. Oh my God, I'm going to die,'" Hager-Bradley said she heard one person screaming.

There have been hundreds of hot air balloon accidents in the U.S. and overseas, according to records from the National Transportation Safety Board.

The majority aren't fatal. However, in February 2013, at least 19 people died after a hot air balloon flying over Luxor, Egypt's city of pyramids, caught fire and plunged down into a sugar cane field.

"Ballooning is normally a very safe, routine activity," Glen Moyer, editor of Ballooning magazine, the in-house publication of the 2,200-member Balloon Federation of America said after the Luxor crash. "It's an activity that thousands of people participate in all the time and do so safely."

In the U.S., hot air balloons -- which use propane gas to heat the air that rises into the balloon and lifts it -- are built to standards approved by the FAA, Moyer said. In order to get a license, pilots must demonstrate a proficiency in emergency skills as well as the ability to operate the balloon. They then must go through a flight review every two years, he said.